The Financial Tools Your Startup Needs to Succeed
10 Jan 2022
The financial tools you need to be using to successfully run your business.
Financial tools don’t come in one-size-fits-all and—with so many platforms out there—knowing what functionalities you need to effectively run your business can quickly become overwhelming. That’s why, after working with many of the best performing startup businesses, we’ve gained a solid understanding of what a typical finance stack should look like and we’re here to share our findings with you.
From accounting software and payroll management systems to cash flow forecasting and other platforms: we’ve compiled our comprehensive list of the tools you need, their features and benefits, and our top picks for each category.
Accounting software: threading all your finances together
It’s good practice to keep track of your incoming and outgoing expenses, plus everything else that goes on in your business’s finances. However, manually controlling all your money matters can quickly become a real challenge. This is why having accounting software is non-negotiable to keep up with your finances and keep them in check.
Additionally, to find the right accounting software for your needs, you need to consider certain features and how they relate to your requirements for:
With the right accounting software plugged into your business’s finances, you’ll be able to keep on top of your cash flow plus you’ll have gained back valuable time from laborious manual accounting tasks to dedicate to other areas of your business, such as growth.
Xero for intuitive accounting
Xero’s a great tool that’s intuitive, easy to use, and covers the key accounting areas, plus you can customise it (to an extent) to suit your needs.
Payroll management: manage your staff and pay them on time
At the very least, your payroll management system should facilitate the management, control, and automation of employee pay. A great system should assist organisations of all sizes in complying with tax regulations, other areas of financial compliance, and—importantly—reduce your time spent on payroll each month. When choosing a payroll system, check what key features you require such as:
calculating expenses (including PAYE tax, and NI and pension contributions)
tracking staff leave
Pento: automated payroll
Pento’s a great cloud-based payroll platform that automates everything from tax calculations to HMRC payments, plus it integrates with Xero for seamless data sharing between your financial tools.
Up and coming in this space is the Onfolk that combines key features of HR and payroll into one platform.
Cash flow forecasting: know where your business is heading
Cash flow forecasting is important, especially if you are aiming to seek investment or you are looking to sell your business down the line. Getting to grips with your financial forecasting in the early stages of your business development and establishing healthy practices and procedures as soon as possible will pay off as you grow. Spreadsheets are a good place to start when forecasting cash flow, but as you grow chances are you’ll need the assistance of either a cash flow forecasting platform or an accountant (or both).
Float: the handy cash flow forecasting tool
When you’re ready to turn to cash flow forecasting tools, Float is a popular platform that greatly helps when your financial planning becomes too complex for spreadsheets and requires automation, project timelines, resource planning, and other features.
Automated billing and payments: keep on top of your expenses
Having a dependable billing and payments system will make your outgoings much more efficient. Plus, having an automated billing payments system will mean you no longer have to make each payment manually, saving you significant time in the process. Moreover, with a billing platform keeping on top of your outgoings you’ll be consistently paying within terms and keeping your supplier relationships strong.
Pleo: a great tool for controlling your expenses
When it comes to purchases and expenses, Pleo is a great business expense tool that issues company smart cards, enabling you and your team to purchase what you need while Pleo deals with everything behind the scenes.
Our platform also has a powerful billing and payments system built-in that enables our clients to manage their outgoings from one convenient dashboard. Click here to learn more!
E-commerce solutions: essential for online selling
Customers are eager to make online purchases instantly, whether it’s by credit card, gift vouchers, or using their mobile phone. An excellent e-commerce solution is essential if you want to successfully sell online and win your customers’ trust in the process. What’s more, you’ll be able to respond to market demands and quickly bring in new product lines with a trusted e-commerce platform handling your payments.
Paypal and Stripe for e-commerce
Paypal is used and trusted around the world and for good reason. It allows you to connect with more than 295 million customers around the globe and across many different platforms and marketplaces. Alternatively, Stripe is another excellent payments platform that offers a fully integrated suite of payments products. Both platforms’ fees are comparatively high, but they provide a seamless service with very good customer service in return.
International payments: get rapid transfers at the best FX rates
It’s useful to consider international payments if you have clients or customers outside the UK. While your main bank may allow you to send and receive international payments using services such as the SWIFT network, you need to check whether their payment rails are best-suited to you and your clients’ needs. There are many different global online payment options available, including PayPal, so it’s important to consider your specific needs before settling on just one provider.
Make sure you weigh up these factors:
the country you’re sending funds to or receiving them from
frequency of payments
size of payments, and whether they are time-sensitive
Wise: the international payment tool you need
Wise (formerly Transferwise) is a very good international payments tool that creates virtual accounts in your destination country and then handles the FX on its platform at very competitive rates.
With even better rates, our global business payments service allows you to easily pay invoices, salaries, and make cross-border payments in 30+ currencies with more added regularly from one convenient place. To find out more, click here!
Get your financial stack off to a great start and keep going
It’s important to establish your financial stack correctly from the start so you can effectively scale your business without unpleasant financial bottlenecks and hiccups along the way. Bear in mind that all these tools have associated costs such as monthly subscriptions, fees, and add-ons so your financial stack can potentially become very costly very quickly. For this reason, it’s important to carefully plan when you’ll need specific financial tools during your growth—and not stick to manual entry spreadsheets for so long that they become a challenging burden as you scale and expand.